577 F.

2d 126

6 O.S.H. Cas.(BNA) 1631, 1978 O.S.H.D. (CCH) P 22,791

Ray MARSHALL,* Secretary of Labor, Petitioner,
v.
CITIES SERVICE OIL CO. and Occupational Safety and
Health
Review Commission, Respondents.
No. 76-1927.

United States Court of Appeals,

Tenth Circuit.
Submitted March 14, 1978.
Decided June 5, 1978.

Nancy L. Southard, U. S. Dept. of Labor, Washington, D. C. (Carin A.

Clauss, Sol. of Labor, Alfred G. Albert, Acting Sol. of Labor, Benjamin
W. Mintz, Associate Sol., Washington, D. C., for Occupational Safety and
Health, Michael H. Levin and Allen H. Feldman, Washington, D. C.,
Counsel for App. Litigation, on briefs), for petitioner.
Robert R. Reis, Tulsa, Okl. (Russell H. Smith, Tulsa, Okl., on brief), for
respondent Cities Service Oil Co.
Before HOLLOWAY, BARRETT and McKAY, Circuit Judges.
BARRETT, Circuit Judge.

The Secretary of Labor (Secretary) petitions to review and set aside an order of
the Occupational Safety and Health Review Commission (Commission). The
petition for review does not involve factual issues. The challenge posed relates
to the propriety of the legal conclusions reached by the Commission in arriving
at its ruling that Cities Service Oil Co. (Cities) had not violated the general duty
clause, 29 U.S.C.A. 654(a)(1)1 of the Occupational Safety and Health Act of
1970 (OSHA), 29 U.S.C.A. 651, et seq. A review of the pertinent and
undisputed facts should facilitate our review.

Cities owns producing oil and gas leases near Holyrood, Kansas, including an

Cities owns producing oil and gas leases near Holyrood, Kansas, including an
area called the Stoltenberg lease, from which is produced sour crude oil (oil
containing detectable amounts of hydrogen sulfide). Within the leasehold field
were a number of free water knockout tanks utilized by Cities to separate water
and crude oil in order to render the oil deliverable to a pipeline. The tanks
contain sacrificial anodes, consisting of blocks of magnesium which neutralize
impurities in the crude oil thereby preventing corrosion of the tanks. From time
to time, Cities had the tanks drained and cleaned and the anodes replaced. This
work was done by independent contractors.

On August 16, 1973, the day of the alleged violation, Fry's Tank Service, Inc.
(Fry's), an independent contractor, sent its employee, Jim Thach (Thach), to
clean one of Cities' tanks and to replace the anodes therein. Thach had been
employed by Fry's since 1971. Prior to 1971, Thach had worked for some 18 to
20 years as an independent contractor in the tank cleaning business. When
Cities had contracted with Fry's to clean the tank and replace the anodes, Cities
agreed to supply personnel to assist Fry's. To this end four Cities' employees,
Harold Holmes (Holmes), Delbert Hendricks (Hendricks), Clyde Rathbun
(Rathbun) and Dale Wittich (Wittich), were at the tank jobsite to assist Thach.
Holmes, Hendricks and Rathbun each had over 25 years experience in oil field
work. Rathbun was a personal friend of Thach.

After the tank was cleaned a ladder was placed in it and Thach descended the
ladder stopping midway to accept an anode handed to him by one of Cities'
employees. After receiving the anode, Thach completed his descent. He then
placed the anode on the bottom of the tank, started back up the ladder and
collapsed. Holmes entered the tank. He was able to lift Thach out of the tank to
the reach of the other Cities' employees after which he also collapsed inside the
tank. Thereafter, while Rathbun revived Thach and called for help, Hendricks
and Wittich entered the tank in order to remove Holmes therefrom. Their
efforts were to no avail, inasmuch as they, too, collapsed inside the tank. Thach
then reentered the tank in an attempt to rescue Holmes, Hendricks and Wittich,
but he was overcome a second time. When Rathbun returned after calling for
help on a radio in his truck, he found the four men lying dead inside the tank. It
was later determined that they had died of hydrogen sulfide inhalation.

Prior to the accident Cities had, repeatedly, orally instructed its employees not
to enter the tanks on the Stoltenberg lease. Fry's had also instructed its
employees not to enter such tanks. However, it is uncontested that at the time of
the accident Cities was aware that anode replacement in this particular tank did
require entry.

On August 24, 1973, eight days after the tragedy, a citation for serious violation

On August 24, 1973, eight days after the tragedy, a citation for serious violation
was issued to both Cities and Fry's for failure to provide a place of employment
free from recognized hazards. Serious violations arise under OSHA whenever
"there is a substantial probability that death or serious physical harm could
result from a condition which exists unless the employer did not, and could not
with the exercise of reasonable diligence, know of the presence of the
violation." As a result of receiving a citation for serious violation, Cities was
fined $1,000 which was reduced by 20% for good faith and 20% because Cities
had no previous inspection history by the Kansas City OSHA office. Fry's was
also fined $1,000 which was reduced 20% for good faith, 20% for not having a
previous inspection history, and 10% for size since Fry's had fewer than twenty
employees.

The citations were administratively reviewed in the course of a two-day hearing

before an administrative law judge, who entered an order upholding the
citations. In so ruling, the administrative law judge noted, inter alia :

.8. . hydrogen sulfide is a recognized hazardous material; Cities' argument that it had
no prior knowledge of hazardous concentrations of hydrogen sulfide at the
Stoltenberg lease is not acceptable; Cities health coordinator had never been to the
lease to check for hydrogen-sulfide content; sour crude contains detectable amounts
of hydrogen sulfide; on the date of the accident there was a recognized hazard to the
employees working on the tank; Cities oral instruction to its employees not to enter
the tanks did not constitute reasonable diligence on its part; Cities' employees were
not warned of the dangers, including hydrogen sulfide, of entering the tank and they
instinctively attempted to save Thach and each other; Cities' argument that it could
not foresee that its employees would enter the tank after being instructed not to do so
is not acceptable; it was entirely foreseeable that the employees might attempt the
rescue of a fellow employee while working on the tank; Cities and Fry's were
participating directly together even though Fry's was hired as an independent
contractor; the only issue is whether Cities and Fry's furnished a place of
employment free from recognized hazards; Cities should have furnished their
employees with testing equipment, masks and harness equipment; and that Fry's
should not have allowed Thach to work on a job it was not familiar with.
9

The administrative law judge thereafter incorporated his observations into

detailed findings and conclusions in the order upholding the citations.

10

On appeal, the Commission affirmed the citation and notification of proposed

penalty issued to Fry's and vacated the order upholding the citation relating to
Cities. The majority opinion of the Commission stated, inter alia:

. . . The tank in question had been cleaned about every two years; the tank had been
11

11
cleaned 5 or 6 times since being placed in service and was cleaned each time by
Thach; when Thach was self-employed he had done other work for Cities which
required entry into a "stock tank" and that he always did so while wearing a safety
belt with someone outside holding a safety line attached to the belt; on the day of the
accident Cities personnel worked with Thach in preparing the tank; both Fry's and
Cities were aware of the hazards of hydrogen sulfide; because it knew of the hazards
of entering a tank Cities instructed its employees not to enter the tanks on the
Stoltenberg lease; on locations where Cities employees were required to enter
confined spaces they were required to test the atmosphere prior to entry, use
breathing equipment and safety lines where necessary; both Fry's and Cities
recognized the hazards of hydrogen sulfide and there were readily available feasible
means to protect against the hazard; Fry's violation must be affirmed, since all
employees, including experienced personnel like Thach, must receive supervision
concerning the hazards inherent in their employment; the gravamen of the charge
against Cities is that it should have had rescue equipment available at the site so a
rescue could have been effectuated without endangering its employees; although
Cities was charged with failing to furnish rescue equipment it was not the party who
committed the violation (entering the tank) which led to the necessity of the rescue
attempt; a necessary element of a general duty clause violation is that the employer
must be able to foresee the hazard to its employees; the dispositive question is
whether Cities could reasonably foresee that Fry's would perform the work in an
unsafe manner in violation of the Act necessitating a rescue attempt; the record does
not establish that Cities "should reasonably have foreseen the violation committed by
Fry's"; Cities knew the tank was being cleaned by an experienced person who, in
some of the work performed for Cities, had used protective equipment; that had
Thach used safety equipment on the day of the accident, it would have negated the
need of Cities personnel to enter the tank in a rescue attempt; and that Cities could
not foresee that Thach would work in such a manner that its employees would be
endangered in attempting to rescue him.
12

A concurring Commission opinion 2 observed inter alia, that:

13
Thach's
death was the result of his disobedience of the express orders of Fry's
president; the Act requires that "each employee shall comply with . . . orders issued
pursuant" to the Act (29 U.S.C.A. 654(b)); employers are not to be held liable
where a violation results from an employee's wilful misconduct in disobeying an
employer's direct order, particularly when as here, the only endangered employee is
the one who violates the order; the Act did not intend to make insurors of
employers; it was reasonable for Fry's president to expect that Thach would comply
with the order; as to Cities, an employer is liable under the Act only when his own
employees are exposed to a hazard, and he is not liable when workers employed by
another are exposed to a hazard even if it happens at his worksite; Cities cannot be

in violation as a result of the hazardous exposure of Thach and the case against it
must rest on the exposure of its own employees; Cities did not expose its employees
to an unsafe working area, since the duties of its employees did not require entry into
the tank and there was no showing that they were exposed to hazardous atmospheric
conditions while working on the exterior of the tank; Cities had adequately apprised
its employees of the dangers of hydrogen sulfide via its "Safety Guide" and Cities'
local policy concerning tank entry; that the local rule prohibiting entry into tanks
had been discussed "a number of times" at monthly safety meetings during the ten
years prior to the accident; the Cities employees involved in the accident were
reliable workers, three of whom had been employed by Cities for 25 years or more
so that "Cities had no reason to believe that they would violate the policy of no tank
entry in the normal course of duties which did not require tank entry;" Cities was not
liable to provide equipment, gas masks, and lifelines on the theory that these items
would be needed in the rescue of Thach; it would be unreasonable to require an
employer to provide his employees with rescue equipment for the purpose of
rescuing employees of independent contractors working at the employer's jobsite;
each employer is responsible for the safety of his own employees; there was no good
reason for Cities to expect it would be necessary to rescue Thach, who had
previously changed the anodes in this tank 5 or 6 times over a period of 12 years
with no ill effects; and that Cities experience over the preceding 58 years had
indicated that hazardous quantities of hydrogen sulfide were not a problem in
Western Kansas where the Stoltenberg lease was located.
14

On appeal the Secretary presents one issue: Whether the Commission

erroneously absolved Cities of safety responsibilities where it (Cities)
knowingly sent employees to participate in a hazardous tank-cleaning operation
without protection against deadly hydrogen sulfide gas contained in that tank.

15

OSHA was enacted with a broad remedial purpose, i. e., protection of the
worker from industrial injury. Clarkson Construction Company v. Occupational
Safety and Health Review Commission, 531 F.2d 451 (10th Cir. 1976). Where
there is substantial evidence in a record supportive of Commission findings, the
findings must be considered conclusive on review. Stockwell Manufacturing
Company v. Usery, 536 F.2d 1306 (10th Cir. 1976). The expertise of the
Commission is presumed in matters of job safety. In Brennan v. Occupational
Safety and Health Review Commission, 501 F.2d 1196 (7th Cir. 1974), the
court observed:

16 note at the outset that the . . . Commission is presumed to have technical

We
expertise and experience in the field of job safety. A court must, therefore, defer to
the findings and analysis of the Commission unless such findings are without
substantial basis in fact. Federal Power Commission v. Florida Power and Light Co.,

404 U.S. 453, 463, 92 S.Ct. 637, 30 L.Ed.2d 600 (1972). The Act itself states: "The
findings of the Commission with respect to questions of fact, if supported by
substantial evidence on the record considered as a whole, shall be conclusive." 29
U.S.C. 660. In addition, the Commission's interpretations regarding the meaning of
the Act should be given substantial deference by a court.
501 F.2d at 1198-1199.
17
18

Commission decisions, then, are to be upheld unless they are " arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law." In
Dunlop v. Rockwell International, 540 F.2d 1283 (6th Cir. 1976), the court
cited to Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., et
al., 419 U.S. 281, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974), for the following:

19number of circuits have explicitly or implicitly concluded that the proper standard
A
to be applied when reviewing a Commission decision is set out in the Administrative
Procedure Act, 5 U.S.C. 706(2)(A):The reviewing court shall
(2) hold unlawful and set aside agency action, findings, and conclusions found to be
20
21 arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
(A)
law.
22 Intercounty Construction Co. v. OSHRC, 522 F.2d 777, 779 (4th Cir. 1975),
See,
cert. denied, 423 U.S. 1072, 96 S.Ct. 854, 47 L.Ed.2d 82 (1976); Brennan v.
OSHRC (Kesler and Sons Construction Co.), 513 F.2d 553, 555-56 (10th Cir. 1975);
Budd Co. v. OSHRC, 513 F.2d 201, 204 (3rd Cir. 1975); Brennan v. OSHRC
(Hendrix), 511 F.2d 1139, 1141 (9th Cir. 1975); Brennan v. OSHRC (Republic
Creosoting), 501 F.2d 1196, 1198 (7th Cir. 1974).
23 Supreme Court in Bowman Transportation, Inc. v. Arkansas-Best Freight
The
System, Inc. et al., 419 U.S. 281, 285-286, 95 S.Ct. 438, 442, 42 L.Ed.2d 447
(1974), stated:
24
Under
the 'arbitrary and capricious' standard the scope of review is a narrow one. A
reviewing court must 'consider whether the decision was based on a consideration of
the relevant factors and whether there has been a clear error of judgment. . . .
Although this inquiry into the facts is to be searching and careful, the ultimate
standard of review is a narrow one. The court is not empowered to substitute its
judgment for that of the agency.' The agency must articulate a 'rational connection
between the facts found and the choice made.' While we may not supply a reasoned
basis for the agency's actions that the agency itself has not given, . . . we will uphold
a decision of less than ideal clarity if the agency's path may reasonably be discerned.

(Citation deleted.)
540
25 F.2d at 1288.
26

Administrative adjudications of the Commission are, of necessity, entitled to

great weight. In Brennan v. Occupational Safety and Health Review
Commission, 502 F.2d 946 (3rd Cir. 1974), it was stated that:

.27. . We may also distinguish the separate problem of a conflict between the
Secretary and the Commission as to the proper interpretation of a safety standard,
which may involve the statutory allocation of the rule making power (in the
Secretary) and the adjudicatory function (in the Commission). See, e. g., Brennan v.
Southern Contractors Service, 492 F.2d 498 (5th Cir. 1974); Brennan v.
Occupational Safety & Health Review Commission (Gerosa, Inc.), 491 F.2d 1340
(2d Cir. 1974). Citations under 10 for violation of the general duty clause involve
administrative adjudications rather than rule making, and petitions for review in
general duty clause cases involve more or less traditional standards for reviewing
adjudications under a statute. Section 11(a), 29 U.S.C. 660, states that we must
afford to the Commission's fact-finding the same deference as to the fact-finding of
such agencies as the National Labor Relations Board. See, e. g., Universal Camera
Corp. v. N.L.R.B., 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951); N.L.R.B. v.
Princeton Inn Company, 424 F.2d 264 (3rd Cir. 1970). (Emphasis supplied.)
502 F.2d at 950-951.
28
29

Applying these standards to Cities we hold that the Commission properly acted
within the scope of its powers and limitations in vacating the citation and
notification of proposed penalty issued to Cities. The Secretary concedes, "This
petition for review presents no factual issues, but only the propriety of legal
conclusions the Commission majority reached on undisputed facts found by its
administrative law judge and adopted by the agency."

30

We cannot set aside the Commission's vacation of the citation issued Cities as
"arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law," when, as here, the dispositive, uncontested facts establish that: Cities
had a local policy against tank entry; Thach had previously cleaned the very
tank involved in the accident 5 or 6 times without any adverse effects; Thach
had been the only person to clean the tank and replace the anodes since the tank
had been placed in use; Thach had used protective equipment on other such
jobs performed for Cities; in other areas where Cities' personnel were required
to enter such tanks, atmospheric testing and safety equipment were required;
the dangers of hydrogen sulfide were fully recognized and appreciated by

Cities, which had no such prior recorded incident in 58 years at the lease site;
the atmospheric working conditions outside the tank were not established to be
anything but "free from recognized hazards"; OSHA's Kansas City office had
no previous inspection history of Cities at the Stoltenberg lease.
31

The Commission's vacation of Cities' citation was logical and proper. To hold
otherwise as observed in the concurring opinion, would require employees of
Cities to provide rescue equipment for the purpose of rescuing employees of
independent contractors working at its jobsites.

32

WE AFFIRM.
HOLLOWAY, Circuit Judge, dissenting:

33

I respectfully dissent.

34

I am convinced that the undisputed findings of basic, subsidiary facts by the

Administrative Law Judge are amply supported and require a ruling sustaining
the citation and penalty against the respondent Cities Service Oil Company.
More specifically, I am persuaded that the reasoning of Commissioner Cleary's
partial dissent is sound and I will only briefly outline the reasons which lead me
to agree with his views.

35

The lead opinion of Chairman Barnako primarily rejects the citation against
respondent Cities Service on the ground that it could not reasonably have
foreseen that the independent contractor Fry's would perform the work on the
tank in an unsafe manner and give rise to the need for a rescue attempt.
Reliance is placed on prior successful performance of the work by Thach a
number of times. The lead opinion concludes that it would be an unreasonable
burden for the employer to be required to anticipate every violation such as
Thach's entry of the tank under conditions which constituted a 5(a)(1)
violation itself.

36

The basic facts are undisputed and need not be repeated. The compelling
essentials are that the tragedy concerns a highly lethal substance presenting a
recognized hazard, as Chairman Barnako's lead opinion notes (C.D. 5); that
respondent Cities' employees were called on to assist Thach in his work; that
although not in the tank, Cities' employees were working closely with Thach, in
an arrangement which the Administrative Law Judge described as the
"complete interlocking of Cities Service employees' activities with that of the
Respondent Fry's employee," based on detailed testimony describing their

work. (Administrative Law Judge's Decision, 13-14; see also Commissioner

Cleary's opinion at pp. 21-24 of the Commissioners' opinions). Commissioner
Cleary concluded (id. at 24):
37
Cities
Service knew that its employees were going to assist the Fry's employee with
the tank cleaning procedure. It knew that the Fry's employee had to enter the tank to
replace the anodes. It knew that hydrogen sulfide gas is a recognized hazard in the
Stoltenberg area of Kansas. It knew or should have known that employees who are
working together as a team, regardless of prior instruction concerning entry into
tanks, will set aside a specified course of conduct and react humanly to save the life
of a fellow worker. See Akron Brick & Block Co., No. 4859, BNA 3 OSHC 1976,
CCH OSHD para. 20,302 (1976). Furthermore, the record reveals that both
qualitative and quantitative tests for hydrogen sulfide could have been performed
easily by the employees on the worksite had Cities Service provided the equipment
and a minimal instruction period. Indeed, since the time of the accident, Cities
Service has initiated a new procedure that requires the testing of all confined spaces
to be entered on its jobsite regardless of whose employees are involved. . . . Finally,
it failed to provide appropriate safety equipment that, admittedly, would have
enabled the Cities Service employees to rescue their fellow worker with a minimum
of danger to themselves.
38

On this record I must agree with Commissioner Cleary's conclusion that

overwhelming evidence demonstrates that respondent Cities failed to render its
workplace free of the recognized hazard, and that there was a demonstrated
availability of feasible measures that would have significantly reduced the
likelihood of the accident.

39

In view of the recognized hydrogen sulfide hazard and the close working
relationship of the employees of Cities with Thach, the danger to all of them
and of an instinctive attempt of a rescue was real. I must agree with the
Administrative Law Judge and Commissioner Cleary's view that a general duty
violation occurred, giving the Act an interpretation in accord with its broad
remedial purpose of protection from industrial injury. Clarkson Construction
Co. v. Occupational Safety and Health Review Commission, 531 F.2d 451, 458
(10th Cir.).

Mr. Marshall succeeded Mr. Usery as Secretary of Labor on January 27, 1977.
Fed.R.App.P. 43(c)

654(a)(1) provides:

(a) Each employer

(1) shall furnish to each of his employees employment and a place of
employment which are free from recognized hazards that are causing or are
likely to cause death or serious physical harm to his employees;
2

The concurring opinion also dissented in part via its determination that a
violation was not established against either Cities or Fry's